The entries of (1) branch are:
Debit: bank deposit
Loan: paid-in capital
(2) The entries of the Head Office are:
Borrow: long-term equity investment
Loans: bank deposits
Extended data:
1. This account accounts for all kinds of equity investments of small enterprises with investment term exceeding 1 year (excluding 1 year), including purchased stocks and other equity investments.
Two, small enterprises foreign long-term equity investment, should be based on the degree of influence on the invested unit, respectively, using the cost method or equity method accounting.
If a small enterprise does not have the same control and significant influence on the invested entity, the long-term equity investment shall be accounted by the cost method; If it has the same control or significant influence on the invested entity, the long-term equity investment shall be accounted by the equity method.
Under normal circumstances, the investment of small enterprises in other units accounts for the voting capital of their own units; If it accounts for more than 20% of the total amount, or if the investment is less than 20% but has a significant impact, it should be accounted for by the equity method.
If an enterprise's investment in other units accounts for less than 20% of its voting capital, or although it accounts for more than 20% of its total voting capital, it has no significant impact, it shall be accounted for by the cost method.
Three, long-term equity investment in the acquisition, should be based on the actual cost as the investment cost.
(1) For the long-term equity investment purchased in cash, the total price actually paid (including taxes paid, handling fees and other related expenses) is taken as the investment cost. The actual payment includes cash dividends that have been declared but not yet received.
The difference between the actually paid price and the declared but not yet received cash dividend shall be regarded as the actual cost of investment and debited to this account; Debit the "dividends receivable" account according to the amount of cash dividends announced but not yet received, and credit the "bank deposits" account according to the actual payment.
(2) Long-term equity investment invested by investors shall be debited to this account and credited to "paid-in capital" and other subjects according to the value confirmed by investors as the actual cost.
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